ACWA Power, an energy company based in Riyadh, has signed an investment agreement with Turkey’s Ministry of Energy and Natural Resources to develop 5 GW of renewable energy projects in the country.

Under the terms of the agreement, ACWA will develop, finance, construct, commission and operate new projects, beginning with two 1 GW solar projects, one in the Karaman province and one in the Sivas province, The Caspian Post reports, citing Turkish media.

ACWA Power has also secured key terms covering a power purchase agreement with state-owned utility EÜAŞ for the sale of electricity generated from each plant.

Türkiye’s Minister of Energy and Natural Resources, Alparslan Bayraktar, revealed that the Sivas project has an agreed fixed rate of €0.0235 ($0.028)/kWh, while the Karaman project was agreed at €0.0199/kWh, the lowest price achieved in Türkiye to date.

The fixed rates will begin after five years of operation and will be valid for a 25-year period. For the first five years, the plants will benefit from an incentive mechanism offering a fixed price of €0.0475/kWh, which Bayraktar said is below the average market price.

The minister added that the two projects will meet the electricity needs of a total of 2.1 million households. Each project is expected to break ground this year, Bayraktar added, and be operational by early 2028.

The second phase of Acwa’s agreement will develop a further 3 GW of renewables across solar and wind power plants. The program is expected to bring up to $5 billion in foreign direct investment across both phases and create thousands of jobs, according to a statement from Acwa.

Türkiye installed 4.7 GW of solar last year, taking cumulative capacity to near 25 GW.

The country has set a target of deploying 120 GW of renewables by 2035. It is also working towards reducing emissions by 41% by 2030 and achieving net zero by 2053.